WASHINGTON -- With Congress and the Administration
scheduled to resume their year-end budget negotiations Tuesday, The Concord Coalition
today released an issue brief entitled “Discretionary Spending Caps: What's
Next?”(RequiresAdobe Acrobat Reader) Now available on-line, the
document urges officials to enact a new budget cap based on the Congressional Budget
Office's inflation-adjusted baseline of approximately $611 billion for fiscal year
2001.

The brief presents
the history of spending caps; outlines several scenarios that might play out – major
surgery (make the cuts); the Houdini maneuver (gimmicks); declare victory and get out;
spend and cap; and cap and spend; and explains Concord's position that the spending
caps should be retained but raised to reflect changed fiscal circumstances and political
reality.

“It is apparent
that the current spending caps are no longer viable.
Perhaps it would have been better if the 1997 caps had been followed, but they
weren't. That story is over. The question now is what comes next? Without
credible caps on discretionary spending, what comes next is likely to be a messy,
arbitrary, expansion of government spending based not on policy priorities but on interest
group clout and the leverage of powerful legislators.
It is no secret in Washington that this is hunting season for lobbyists, and the
pickings have rarely been so bountiful. Standing
in front of this oncoming train will not stop it. A
more effective means must be used to apply the brakes. The best answer is a new set of
caps set at a more realistic level to reflect changed circumstances,” explained
Robert Bixby, Concord's Executive Director.

“New caps will
impose no more discipline than the current caps if they do not reflect the dramatically
changed fiscal circumstances over the past three years. Recent experience has shown that
when the government is running an overall surplus, Congress and the President are not
prepared to freeze discretionary spending, let alone make sizeable cuts.

“…Negotiating a new comprehensive fiscal framework for an era of projected
budget surpluses is a task that will have to be postponed until after the November
election. There is no time for such negotiations before then, and in any event it would
make little sense to enter into such a process now given that a new President and Congress
will take office in January. However, the question of what to do with the caps this year
cannot be postponed.

“Few on Capitol
Hill are anxious to say so publicly, but it is widely believed that by the time this
year's budget negotiations are over, discretionary budget authority for fiscal year
2001 will stand at $630 billion or higher. This
is well above the $611 billion that the Congressional Budget Office says would be needed
to keep pace with inflation; well above the $600 billion limit of the Congressional Budget
Resolution; and almost $100 billion over the statutory budget authority cap ($542
billion).

“The Concord Coalition believes that a fiscally
responsible and politically feasible compromise measure for fiscal years 2001 and 2002
would be to reset the caps to reflect CBO's inflation-adjusted baseline.

“…Adopting
the inflation-adjusted baseline would provide enough budget authority to fund national
priorities while imposing more fiscal discipline than allowing spending to free-float in
an uncapped atmosphere. Agreeing to spend roughly $611 billion in early
September may well prevent a runaway omnibus spending bill in late October of as much as
$630 billion. Moreover, the higher spending goes this year, the higher the baseline
and the higher future spending is likely to be.

“…Whatever
the end result of this year's budget process, the American people deserve an honest
accounting of their tax dollars. The gimmicks must end.
With nearly $2 trillion in play, it is important to have a credible process for
deciding how to prioritize federal resources. Congress
and the President should approach this task in a serious manner with respect for the
public, the process and each other. Rules that are routinely violated are worse than no
rules at all because they fail in their basic purpose to control spending and they breed
contempt for the budget process by encouraging gamesmanship and chaos. Unfortunately, that is where things now stand. In this
highly political year, the challenge for Congress and the President is to rise above
politics and restore honesty and discipline to the budget process,” Bixby
declared.

The Concord
Coalition is a nonpartisan, grass roots organization dedicated to balanced federal budgets
and generationally responsible fiscal policy. Former
U.S. Senators Warren Rudman (R-N.H.) and Sam Nunn (D-Ga.) serve as Concord's
co-chairs and former Secretary of Commerce Peter Peterson serves as president.